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Thursday, July 13, 2006

New York developer's eminent-domain crusade comes to California

Howard Rich may live in New York, but he has waded deep into California politics. The multimillionaire developer, and president of U.S. Term Limits, has bankrolled California's eminent-domain measure to the tune of $1.5 million. But the money is only one front in Rich's national crusade against eminent domain, an effort that spans more than a half-dozen states and millions of dollars.

"We have the ability to, in effect, bypass legislatures by going directly to the people through the initiative process," says Rich from his New York office.

Through a web of organizations, Rich is backing eminent-domain initiatives in Arizona, Idaho, Missouri, Montana, Nevada, Oklahoma and Washington with $4 million--though no state has received as much financial support as California. In each of these efforts, Rich himself is never disclosed as a major donor. Instead, he steers his contributions through nonprofit intermediaries, such as the Fund for Democracy, which he is using to finance California's Proposition 90 campaign.

"I think California often leads the nation," says Rich. "It is the largest, most populous state and it is very important to us that property rights be restored there."

But the influx of out-of-state money pushing measures to amend state constitutions across the country has angered many local activists.

"They are backed by an organization that is chaired by a New York real estate developer and that makes you wonder who is going to benefit," says Aaron Toso, spokesman for the campaign against Washington's eminent-domain measure. "Obviously if people don't live here they wont have to pay the extra taxes and sit in the extra traffic."

Here in California, opponents of the eminent-domain initiative are also accusing Rich of pushing his unwanted, out-of-state agenda on the state's voters.

"The fact that this one guy from New York, an out-of-state multimillionaire, has decided, 'I know what's best for the nation and I am going to tell all the state's how to do things right' … that's offensive," says No on 90 spokeswoman Kathy Fairbanks.

"This is really a grassroots, populist issue. It is one of the government, the political establishment taking advantage of power against the little guy," says Spillane, who adds that the campaign has raised money from more than 5,000 individual donors in California since Rich's contribution. "It is very much a California-driven issue and we are busy raising money from Californians to fund it."

But ultimately it was Rich's money that pushed the issue onto the November ballot.

Earlier this year, Sen. Tom McClintock, R-Thousand Oaks, the GOP nominee for lieutenant governor, tried to gather signatures to qualify his own eminent-domain measure--one that was far less sweeping than what is now Proposition 90. But McClintock's efforts failed due to a lack of funding. McClintock could only secure pledges totaling $1 million. He credits Rich with providing the money needed to bring the issue before the voters.

"They were able to raise the money to qualify their initiative. I was not," says McClintock, who has endorsed Proposition 90. "I learned during the car-tax initiative that if you don't have the money lined up before the signature gathering, you shouldn't start."

So who is the man behind Proposition 90?

He's certainly no stranger to California politics.

As far back as 1990, Rich recalls making a small contribution to California's original term-limits measure, Proposition 140. In 2002, when then-Senate leader John Burton, D-San Francisco, placed a term-limits extension on the ballot, Rich responded by corralling a $1 million donation for the campaign against the measure, through an affiliate organization, Americans for Limited Terms, less than three weeks before Election Day.

"The bad guys were very surprised by that funding at the end," remembers Rich.

For Rich, the "bad guys" have always been incumbent politicians and those seeking to expand the reach of government.

A former libertarian party activist (he officially left the party in 1983), Rich has deep roots in limited-government politics. He sits of the board of directors of the Cato Institute, a libertarian think tank based in Washington, D.C., and he is the chairman of Americans for Limited Government, a national coalition dedicated to smaller government.

His wife, Andrea, until recently owned the libertarian Laissez Faire bookstore in New York, and in 1990 he and his wife acquired the Libertarian Review Foundation and renamed it the Center for Independent Thought. He and his wife also have been financial backers of Reason, a leading libertarian monthly magazine.

In 1992, Rich bought the Citizens for Congressional Reform, then a leading term-limits advocacy group. He quickly reorganized the group as U.S. Term Limits, with himself as president, and heaped $1.8 million on various state term-limit campaigns by the end of the year, according to Common Cause.

"My interest is in restoring property rights, in term limits, and in capping state government spending at some reasonable limit," says Rich, whose Americans for Limited Government is also sponsoring spending measures in eight states this year.

Rich calls term limits his "first love." But since the Supreme Court's decision last year that expanded the right of government to seize private property for public use, his focus has been on reducing government's ability to use eminent domain.

Here's what his network of political committees and nonprofits have done:

In Missouri, Rich donated more than $1.3 million to gather signatures for two measures, one of which would limit government spending, the other to limit eminent domain, through Americans for Limited Government. But both measures were tossed from the ballot by the secretary of state, though a pending lawsuit is challenging that decision.

In Arizona, the Rich-run Americans for Limited Government has contributed $650,000 to qualify an eminent-domain measure.

In Idaho, Rich's Fund for Democracy, the same nonprofit that donated in California, contributed $237,000 to help qualify an eminent-domain initiative.

In Nevada, the eminent-domain effort, titled PISTOL, or the Initiative to Stop the Taking of Our Land, lists only a single endorsement on its Web site: Americans for Limited Government. The campaign's most recent filings do not list a Rich-backed organization as a donor.

In Washington, an eminent-domain measure that qualified for the fall ballot this week has received $200,00 from Americans for Limited Government.

In Oklahoma, Americans for Limited Government contributed $55,000 to a group called Oklahomans in Action that pushed for an eminent-domain initiative, though the state's supreme court struck down the measure last month because it dealt with multiple subjects, a violation of the state constitution.

In Montana, a group with a near-identical name, Montanans in Action, has qualified a trio of measures for the fall ballot, including one limiting eminent domain. Americans for Limited Government gave the group a $25,000 loan, according to newspaper reports, though the organization has refused to disclose its donors.

In May, Montanans in Action--formed in the least populated state in the union--donated $600,000 to the eminent-domain campaign in California, the nation's most populous state.

Rich denies that he is the man behind for Montanans in Action. "That is a completely separate group," he says, though the Montana organization's spokesman, Trevis Butcher, has close ties to Rich's Americans for Limited Government as the past chairman of the campaign to keep Montana's 8-year term limits.

There are also records of recent e-mails between Butcher and John Tillman, president of Americans for Limited Government, and Paul Jacobs, the only staffer listed at U.S. Term Limits other than Howard Rich.

Those records were obtained by Helena attorney Jonathan Motl, who is considering filing a complaint with the state's campaign finance commission to force the group to reveal its donors.

"I am working on that right now," says Motl.

Rich has ruffled some feathers in South Carolina politics as well, skirting the state's contribution limits with multiple donations to Gov. Mark Sanford. Since December, nine separate maximum donations of $3,500 have been made to the governor by individuals and businesses with ties to 73 Spring Street, New York, N.Y., where Rich's Fund for Democracy is headquartered. Rich is not among the declared donors.

Supporters of the eminent-domain movement acknowledge that Rich's money has played a role in the nationwide debate over property rights. But they say the issue is so important--and so popular--that the push to strengthen property owners' hand against the use of eminent domain would still be occurring without Rich's financial backing.

"Certainly he has provided the seed money to qualify these initiatives, but it would be a mistake not to recognize the tremendous grassroots appeal," says McClintock.

Bills to limit the scope of eminent domain have sailed through 27 state legislatures since the Supreme Court decision. And 43 of the 44 state legislatures that have convened since the ruling have at least considered legislation to limit the taking of private property, according to the National Conference of State Legislatures.

But opponents of the ballot-box eminent-domain measures, both in California and elsewhere, see Rich as a major--and negative--driving force.

"The ironic thing about what he is doing is he is as guilty of the same overzealous abuses that he accuses government of," says Fairbanks. "If this should pass, one of the consequences is that we are going to see lawsuit after lawsuit filed--and guess who is the loser in that? The California taxpayers, not Howard Rich."